DAX (Germany) About To Send A Bearish Message To The S&P 500?
by kimblechartingsolutions - May 23rd, 2019 8:01 am
Courtesy of Chris Kimble.
Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!
This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.
It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).
After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S&P 500.
The rally off the bottom of rising channel (1) hit falling resistance at (3), which looks to be near the top of a potential bearish rising wedge.
If the DAX breaks support at (4), it most likely will be sending a bearish message to stocks in Europe and the States. Stock bulls in Europe and the states have their fingers crossed that support holds at (4)!!!
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Emerging Markets About To Submerge If 3-Year Support Breaks?
by kimblechartingsolutions - May 22nd, 2019 8:49 am
Courtesy of Chris Kimble.
Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!
Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.
EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bottom of its rising channel at (3), which becomes an important test of support.
If this support fails to hold at (3), look for the Emerging markets ETF to attract selling pressure. The next important support test after that is the 2017 lows, which is around 5% below current prices.
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The 5 Fatal Flaws of Trading
by ilene - May 21st, 2019 1:17 pm
The 5 Fatal Flaws of Trading
Courtesy of Elliott Wave International
Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit — and more importantly, do it consistently. How do they do that?
That's an age-old question. While there is no magic formula, Elliott Wave International's own Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful. We don't claim to have found The Holy Grail of trading here, but sometimes a single idea can change a person's life. Maybe you'll find one in Jeffrey's take on trading. We sincerely hope so.
The following is an excerpt form Jeffrey Kennedy's Trader's Classroom Collection eBook.
Why Do Traders Lose?
If you've been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn't seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can't seem to prevent that invisible hand from depleting your trading account funds.
Which brings us to the question: Why do traders lose? Or maybe we should ask, "How do you stop the Hand?" Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account.
Fatal Flaw No. 1 — Lack of Methodology
If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct won't work over the long run. If you don't have a defined trading methodology, then you don't have a way to know what constitutes a buy or sell signal. Moreover, you can't even consistently correctly identify the trend.
How to overcome this fatal flaw?
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Commodities; Long-Term Bottom Being Created This Month?
by kimblechartingsolutions - May 21st, 2019 7:05 am
Courtesy of Chris Kimble.
Is the Thomson Reuters Equal Weight Commodities creating a long-term bottom? What the index does at (3) over the next few weeks, will go a long way to answering this important question!
Commodities don’t have much to brag about over the past 8-years, as lower highs have taken place since the peak back in 2011. After the peak in 2011, they have created falling channel (1).
The index hit the top of this channel the prior two months at (2), creating back to back bearish reversal patterns.
Softness this month has the index testing 2017 lows and rising support at (3). While testing this support line, the index is attempting to create a bullish reversal pattern at (3).
Commodities created bulls reversal patterns in 2009 and 2015 along a rising support line. It is attempting to do the same thing again this month.
Are commodities creating a bear market bottom this month? What they do at (3) over the next several weeks will send an important message to this hard-hit index!
One thing is for sure; If you are bullish commodities, you DO NOT want to see support give way at (3)!!!
If you are interested in staying on top of Commodities and would like to be made aware of opportunities in this sector, our Sector/Commodity Sentiment Extreme research report would be something of benefit to you.
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Will S&P 500 Double Top Derail The Rally?
by kimblechartingsolutions - May 20th, 2019 8:25 am
Courtesy of Chris Kimble.
The rally off the December stock market lows has been strong, to say the least. The S&P 500 rallied 25 percent before hitting and testing the 2018 high.
The old highs proved to be formidable resistance and ushered in some volatility in May… and a 5 percent pullback.
In today’s 2-pack, we look at that resistance level – could that be a double top? We can see similar patterns develop on the S&P 500 Index and its Equal Weight counterpart.
Both indexes are testing short-term Fibonacci retracement levels of the recent decline at point (2).
What takes place here after potential double top highs will be important. Stay tuned!
This post was first written for See It Markets.com. To see original post CLICK HERE.
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Weekly Market Recap May 18, 2019
by Chart School - May 19th, 2019 10:48 pm
Courtesy of Blain.
China – U.S. trade talk continued to dominate the week. A heavy selloff Monday was followed by 3 up days, with Friday moderately down.
On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.
Then on Wednesday:
The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.
Trump also called the most recent news “a little squabble”.
On the economic front, retail sales came in below par Wednesday.
Retail sales figures for April showed that U.S. retailers are seeing decelerating purchases for a second time in three months, declining 0.2% last month, compared with expectations for a 0.1% increase. Excluding autos, retail sales were flat for the month, versus expectations for 0.7% growth.
“The 0.2% [monthly] decline in retail sales in April was weaker than the consensus expectation of a small gain and supports our view that GDP growth is set to slow in the second quarter,” wrote Andrew Hunter, senior U.S. economist with Capital Economics.
For the week, the S&P 500 fell 0.8% and the NASDAQ 1.3%.
Here is the 5 day weekly intraday chart of the S&P 500 … via Jill Mislinski.
The week ahead…
Interesting data point:
Trading in fed-fund futures reflect a 74.1% chance of a rate cut this year, with a 32.1% probability of two or more rate cuts by end of 2019, according to CME Group. That is a sharp reversal from just two weeks ago, when the market gave a more than 50% chance that the Fed would hold steady through the remainder of the year.
As a “trade deal has become much less likely [in the near term], what the bond market sees as increasingly likely is the Fed easing policy, a net benefit to stocks,” Gary Pzegeo, head of fixed income at CIBC U.S. Private Wealth Management, said in an interview with MarketWatch.
Wednesday, the Fed will release minutes from its meeting that ended May 1. A few major earnings reports are on the docket, mostly from retailers.
Index charts:
Short term: Both the S&P 500 and NASDAQ might have double tops in which would be bearish. That would be…
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Palladium minor cycle bottom
by Chart School - May 18th, 2019 4:22 am
Courtesy of Read the Ticker.
Once again RealVision TV posts another trade idea, long palladium. We shall review it with our RTT cycle tools and parallel channels.
Any trader will be concerned with the supply shock at $1800 which pushed down price quickly. Profit taking maybe, sure! The question, is there more supply out (or more profit taking) there ready to dump on the market, either now or after any minor advance. This why waiting for the 'C' wave of the A-B-C to form over some more time is a good idea, and once done, we want to see solid buying moving price up before acting, after all we do not want to be early or a lonely bull (Richard Wyckoff logic).
The parallel channel highlights support and resistance, and proves price is moving within a control environment of a 'channel'. A week or two of more price action will give a swing trader move confidence that this trade qualifies as a swing trade with good odds. If goes, and you miss it, move on to the next one.
Of course this is educational only, and consult your broker, mother, wife or financial consultant.
NOTE: The channel tool is from the QuickDraw tool set. The cycle indicator is RTTHurstDPO, and the 90 period cycle was found using our custom Cycle Finder Spectrum.
Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of Gann Angles, Cycles, Wyckoff and Ney logic is the best way to secure better timing than most, after all these methods have been used successfully for 70+ years. To help you applying Richard Wyckoff and Richard Ney logic a wealth of knowledge is available via our RTT Plus membership.
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Banks Sending Bearish Message To Stocks, Says Joe Friday
by kimblechartingsolutions - May 17th, 2019 7:03 am
Courtesy of Chris Kimble.
Quality bull markets prefer to see Banks stronger than the broad markets or at least keeping up with it. Concerns often crop up when banks reflect relative weakness compared to the S&P.
This chart looks at the Bank Index (BKX) over the past few years, reflecting a falling channel of lower highs and lower lows has taken place inside of falling channel (1). This falling channel has now been in play for the past 15-months.
The index hit the bottom of the channel in December of 2018 and a counter-trend rally took place. The rally off the December lows saw the index hit the top of the channel two weeks ago where a bearish reversal took place as the “Sell In May and Go Away” season was getting underway.
Joe Friday Just The Facts Ma’am; A break of support at (2) would send a bearish message to stocks from the banking industry.
Keep a close eye on what banks do at this important test of support!
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War! Good or Bad for Stocks?
by ilene - May 16th, 2019 1:53 pm
War! Good or Bad for Stocks?
Take a look at stock market behavior in times of war… and peace
By Bob Stokes, EWI
After the U.S. recently announced new sanctions against Iran, tensions have escalated between the two countries.
USA Today reported (May 7):
The Pentagon is rushing additional military muscle, including B-52 bombers, to the Middle East to counter Iranian threats to U.S. troops on the ground and at sea.
Of course, it's always best when military conflict can be avoided because as U.S. President Abraham Lincoln said in an 1864 speech:
War at the best, is terrible …
How true. Yet, shifting to the financial arena, what can stock market investors expect during times of war? Is war also "terrible" for market participants?
Some market observers believe so and argue that war diverts resources from productive enterprise. Others posit that war is good for stocks and the economy because the government forks over big money to companies to produce war materials.
So, who has the winning argument?
Well, among many countries in the world, the U.S. has been fortunate to have not had an international military conflict on its soil in the 20th century. If it did, the outcome for the U.S. economy and stock market may have been different. But as it stands, we looked at the path of U.S. stock prices during World War I, World War II, the Korean War and the Vietnam War to see if we could find any consistent correlations.
These four charts from Robert Prechter's 2017 book The Socionomic Theory of Finance show you what our research revealed:
Figure 12 shows a time of war when stock prices (normalized for inflation) rose, then fell; Figure 13 shows a time when they fell, then rose; Figure 14 shows a time when they rose throughout; and Figure 15 shows a time when they fell throughout the hottest half (1965-1975) of a twenty-year conflict. Who wins the war doesn't seem to matter. A group of allies won World War I as stock values reached fourteen-year lows; and nearly the same group of allies won World War II as stock…
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Silver Miners; Can They Bounce From This Key Support Test?
by kimblechartingsolutions - May 16th, 2019 9:50 am
Courtesy of Chris Kimble.
Silver Miners (SIL) have lost over 50% since the highs back in 2016. Is this large of a decline enough to present a buying opportunity?
No doubt the multi-year trend for SIL remains down at this time. The long-term decline and the decline over the past few months has it testing last years lows again at (1).
While testing the lows it finds itself at the apex of a falling wedge pattern at (1). Is a “Double Bottom” being attempted by SIL at the 2018 lows? In my humble opinion, it is too soon to tell, yet possible.
What would it take to suggest that a short-term counter-trend rally is taking shape? The first step would be to break above the top of the falling wedge pattern.
What would it take to send a renewed bearish message from SIL? A support failure at (1)!
What SIL does in the next couple of weeks could send an important message to Silver and Gold Miners (GDX)!!!
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site